Macy's Dips Toes in Brave New Marketing World

Blaring bargain news over PA systems in department stores may become a thing of the past if a pilot project launched Thursday by Macy's and Shopkick catches on with the brick-and-mortar set.

The companies are conducting the experiments in Macy's San Francisco and New York City stores. The pilot makes use of a new technology in iOS 7 and Shopkick's shopBeacon transmitters to feed deal and discount information to shoppers as they roam through a store.

When shoppers who have installed the Shopkick app on their iPhones enter one of the pilot stores in New York's Herald Square or San Francisco's Union Square, they're automatically welcomed by the software and then shown location-specific deals, discounts, recommendations and rewards, without having to remember to open the app.

Shopkick also can tie Web behavior to in-store activity. For example, if you like a specific product online, you can have the Shopkick app remind you about the item the next time you enter a Macy's store.

"We have made great strides in creating the best omnichannel experience at Macy's, and delivering the most relevant messages and offers to our customers at what is arguably the most helpful moment -- while they are shopping in our stores," said Macy's Chief Marketing Officer Martine Reardon.

"With this shopBeacon trial, we are testing the most leading-edge mobile technologies, because we believe they can even further enhance the in-store experience for Macy's shoppers," she added.

Shopping Milestone

Initially, the system will feed only general deals and such to a shopper, but the developers plan to make the consumer experience much more granular by associating information sent to the app with very specific locations in the store. So if you're in the shoe department, a deal on loafers might be sent to you, or a reminder about that pair of boots you placed on your favorites list will pop up on your screen.

Shopkick's system is built on Apple's iBeacon, the Bluetooth Low Energy mobile protocol built into the latest version of the company's mobile operating system, iOS 7. Shopkick has beefed up security by adding encrypted signals to protect retailers and consumers, as well as other proprietary technologies for added accuracy and scale.

"iBeacon is a big milestone in creating the future of shopping," said Shopkick CEO Cyriac Roeding, "and it starts today with shopBeacon at Macy's."

'Super Interesting'

With the launch of the Macy's pilots, what's just been talk by retailers has started to take physical shape.

"Omnichannel has been a big conversation point for retailers for a few years," Ranil Wiratunga, senior director for paid media at
The Search Agency, told MacNewsWorld.

"Now we're finally seeing innovation catch up with execution on omnichannel," he added. "It's trying not only to tap into Millennials and a younger audience, but ... folks across all demographics that want this experience."

Low-energy Bluetooth technology like iBeacon has great potential for retailers.

"This new Bluetooth technology is super interesting, and it's a great way to trigger events once you get a consumer into a store," Chris Fagan, CEO of
Mobestream Media, told MacNewsWorld.

Although Shopkick has been on the vanguard of geofencing technology for retailers, the competition is likely to heat up.

"Shopkick isn't positioned to own this marketplace," Fagan observed. "Anybody who wants to put sensors in stores can do it using this technology -- with the proper approvals."

A gnawing issue with schemes like Shopkick's is whether consumers will see them as a shopping aid or just another threat to their privacy.

Nearly 50 percent of consumers who participated in a recent survey by
ISACA said it felt invasive to receive text messages touting a product as they were walking past it.

Ironically, the demographic group that most found that kind of advertising invasive were older Millenials -- those in the 25-34 age range -- who are prime targets for Macy's and Shopkick.

"So much data is being mined about individuals, and now we're adding their behavior as they walk through a store or look at an item," John P. Pironti, an ISACA risk advisor and president of IP Architects, told MacNewsWorld. "That's really starting to become invasive to the personal space of the individual."